Small-Producer Lifeline

We're the dinosaurs of the industry, claims Dale Brehe, about the collective groups of producers that will make up Family Farms Pork."The producers interested in Family Farms Pork have, on average, 80-100 sows," says Mark Russell, marketing consultant to the group.Family Farms Pork is a producer-owned cooperative that resulted from four years of research by pork producers in Osage and adjoining counties

Stacey Hager and Gretchen Vander Wal | May 01, 2000

We're the dinosaurs of the industry, claims Dale Brehe, about the collective groups of producers that will make up Family Farms Pork.

"The producers interested in Family Farms Pork have, on average, 80-100 sows," says Mark Russell, marketing consultant to the group.

Family Farms Pork is a producer-owned cooperative that resulted from four years of research by pork producers in Osage and adjoining counties in central Missouri.

Through grant funding from USDA and the Missouri Department of Agriculture, the producer group determined integrating into the pork chain was a necessary step to retaining market share.

"We started with our first grant in 1996 as a county group, and it may be a five-year process before we break ground," says Russell. "This has been a very methodical approach."

Family Farms Pork has selected Shelbina, MO, as the location for its cooperative-owned processing plant. Board members anticipate the plant will operate at 2,000 head/day.

The plan is for producer-members to raise about half of the equity needed to capitalize the plant. The additional funding will be provided from a bank loan.

"We do not have any commitments from lenders, but a number of banks have indicated an interest in the project," says Russell.

On the advice of legal counsel, Family Farms is not soliciting equity dollars from producers until they have more information on the project's overall cost.

"We do have a strong database of producers who are waiting to hear from us with the final membership costs," says Russell.

The board anticipates selecting the engineering firm that will build the plant by summer. They will then be able to approach producers with an equity drive.

"We have a minimum level of equity dollars and a hog commitment we have to meet before this plant can work," says Luebbering. At this point, the co-op does not know those minimum levels.

Family Farms will also open its membership drive to neighboring states.

"Producers are not afraid to haul hogs if they own the plant," says Brehe.

Family Farms initially plans to market its products within a 300 to 350-mile radius of Shelbina. We've met with regional grocery stores that are interested in buying products directly, says Russell.

The cooperative foresees some of its value-added products being sold to custom processors initially. The board believes, however, that there may be an opportunity for custom processing within the cooperative structure.

For more information on Family Farms Pork, contact Russell at (573) 455-2453, extension 172, or e-mail [email protected]